Argentina: exports contribute to growth, but GDP per capita plummets

Agricultural exports have allowed Argentina‘s economy to grow, but its GDP per capita has plummeted in recent years, a report by the World Trade Organization (WTO) indicates.

In general, the production and export of agricultural products are of particular importance to the Argentine economy.

What is the profile of that nation in terms of international trade? The WTO ranks it as one of the main world exporters of soybeans and by-products of soybeans, corn and sunflower.

It is also a major producer and exporter of other grains, beef, and dairy products.

Value chains have formed around soy, corn, meat, sunflower, dairy and other products that contribute significantly to GDP and employment, and are important earners of foreign exchange.

Since the beginning of 2013, the productive sectors linked to exports, particularly agriculture, have been the ones that have shown the best performance.

Exports, despite having contracted like the economy in general during that same period, have not only helped to sustain the balance of payments and prevent a further fall in GDP, but have also constituted an important source of financing for the public sector.

Argentina

Similarly, since 2013, global domestic demand experienced a contraction in real terms, which resulted in an average annual drop in real GDP of 1.5% between 2012 and 2020 (of 0.3% if 2020 is excluded).

On average, net exports contributed positively to GDP growth throughout the 2012-2020 period.

Weak economic growth and the devaluation of the Argentine peso against the US dollar led to stagnation and the eventual drop in GDP per capita, which went from $ 13,932 in 2012 to $ 8,442 in 2020.

During 2012-2020, the economy of Argentina was characterized by high levels of inflation and external indebtedness and there were strong pressures on the exchange rate.

In this sense, according to the WTO, the contraction of GDP and the consequent reduction in per capita income are due in part to the measures adopted to contain inflation, and to the increase in the fiscal deficit and public debt.

The economic situation worsened due to the health crisis, which deepened the process of economic recession that began in 2018 and caused a fall in GDP of 9.9% in 2020 and an increase in the unemployment rate to 11 percent.